How Performance Culture Can Help You Build A Great Business

The Performance Culture System that we recommend to clients of Cornerstone Business Advisors provides a simplified approach to creating a company culture that increases business value, profitability and workplace satisfaction. Many of our clients have significantly grown their businesses by implementing the four elements of Performance Culture -- Effective Leadership, Niche Strategy, People Management and Process Excellence.

The idea to write Performance Culture came to me while I was recapping the success that many of our clients continued to experience during the height of the recession. While companies across the country were struggling, many of our clients were growing. In some cases the growth was amazing – 25% to 200% APR. We created a list of our fastest-growing clients and looked for commonalities. What we found was revealing.

While the successful companies were doing many things differently, they all had four traits in common -- effective leadership, niche strategies, a great team and workplace (people), and process excellence. The company owners led in a way that earned the will of their teams. They hired right, communicated expectations and held team members accountable for results. The companies focused on very specific target markets and offered unique products and services. Their niche strategies enabled them to win more clients and earn higher profit margins. The leaders focused on process excellence and made sure processes were documented, followed and constantly improved.

Having a Performance Culture helps you develop strong leaders, high-performing employees and a great company culture. It will create habits that drive profitability and increase your company’s value. The Brax Story is a perfect example of this.

The Brax Story
Brax, Ltd., is not very different than most small businesses. It has fewer than 50 employees and is still owned by its founders, Pete Hexter and John Alexander. Brax is a manufacturer of licensed and promotional products and offers a unique fulfillment service that helps non-profits fund raise. While Brax has been very successful, it has experienced challenges common to businesses that are either growing rapidly or facing challenges in the marketplace. In this case, Brax’s challenges were based on outgrowing its management practices -- practices that used to work when the company had only a handful of employees.

In the beginning, the owners worked hard to create an employee-friendly, family-business atmosphere. The overall company structure was fairly loose and most new hires were family members, friends, or friends of friends. The owners were able to keep their eyes and ears close to the ground, handle issues as they arose and react quickly.

However, as Brax grew it became more and more difficult to keep on top of everything. The business was becoming more complex because it had more customers, more employees, more suppliers and higher working-capital requirements. Daily fire drills became the norm, especially during the busy season. The owners could not free themselves from day-to-day operations without worrying.

The prospect of achieving the owners’ vision of spending more time on strategic activities and less time at work looked bleak. The owners also began to question whether they could sustain business growth if they did not delegate management responsibilities, increase productivity and improve workplace morale. While the business was not in jeopardy and customer satisfaction was high, change had to happen to sustain revenue growth and free the owners from their day-to-day operational responsibilities.

Both Pete and John were committed to change and felt the Performance Culture System had potential. Brax engaged our firm to guide them through the implementation process. We began by assessing the company’s strengths and weaknesses using 360-degree leadership interviews. Our findings validated the owners’ concerns. Employee morale was down and there was mistrust among the team. Employees felt micromanaged and there was a lack of communication. The company’s mission was not shared by all and office politics were high.

However, the interviews did provide good news. The focus on customer satisfaction was strong and the employees believed the owners genuinely cared about them. The confidential 360-degree interviews also increased the trust and rapport I had with the team as its business coach. This trust increased the team’s willingness to adopt the management practices we would later implement as part of the Performance Culture System.

Fortunately, Brax had already had a strong niche strategy -- one of the four elements of Performance Culture. So our plan focused on the remaining three: Leadership Effectiveness, People Management and Process Excellence. The leadership team integrated these elements over a four-month period.
The engagement significantly improved the Brax culture and created a foundation to support future growth. Brax revisited its company vision and mission and made sure it was shared by all. This gave the team a common purpose and a framework to identify Critical Success Factors. The company prioritized its initiatives every quarter, which helped improve its overall focus and time management.

Process documentation and training have made operations more consistent, and turnaround times have decreased. The sales team has a playbook to follow and is frequently coached on how to increase sales and delight customers using the “Brax Way.” There are fewer errors because guidelines for customer orders and fulfillment are followed. The financial processes we put in place include key metrics to gauge company performance, and these are measured daily. During team meetings, managers discuss ways to improve processes. This has increased overall efficiency and profitability.

Accountability has increased with written action plans, 90-day planning sessions and weekly leadership-team meetings. Maverick employees and low performers self-select out of the company, and high performers are rewarded and recognized. Office politics have decreased with the removal of titles and the creation of an accountability chart. Employees have clear expectations in terms of both performance and behaviors. Trust and morale have improved because of candid, frequent communication.

Pete and John worry less about the company and focus more time on strategic initiatives. They also spend less time at the business since they have a key leader who is managing day-to-day operations. The Performance Culture System has improved the leadership abilities of the entire management team. When the timing is right, the owners can now implement a leadership succession plan that will maximize their business’ value and provide attractive retirement options.

The Brax Story should give you confidence that the Performance Culture System works. You simply need to trust the process and stay committed.

Cornerstone Business Advisors provides access to experts in business strategy, management, process and finance. The Cornerstone team includes former C-Level executives, successful entrepreneurs and advisors who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. Cornerstone has worked with hundreds of companies that range from fast-growth start-ups to Fortune 500 corporations. It developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit www.launchgrowexit.com, call 910-681-1420, or email [email protected]